IT Strategy is the process of aligning IT capabilities and resources with the goals and needs of the business. It helps to create value, optimize costs, manage risks, and drive innovation. But how can you develop a deep understanding of IT Strategy's business impact? Here are some tips to help you.
The first step is to assess the current state of IT and the business, and identify the gaps, challenges, and opportunities. You can use tools such as SWOT analysis, maturity models, benchmarking, and gap analysis to evaluate the strengths, weaknesses, opportunities, and threats of your IT environment, and compare it with the best practices and industry standards. You can also conduct interviews, surveys, and focus groups with key stakeholders, customers, and users to understand their needs, expectations, and satisfaction levels.
Using SWOT analysis to assess the current state of an organization without specific context is ineffective. Instead, it's more useful to conduct a detailed analysis of the status quo, comparing it with a vision of the future state. Tools like maturity models and benchmarking against leading players can be beneficial. For a thorough understanding, specific dimensions like technology, organization, and knowledge should be measured. While current risks and reasons for change can be identified, any change initiative should be driven by a clear vision of the future state. Relying on simplistic tools like SWOT for this purpose without considering the future state is considered unprofessional.
The next step is to define the vision and goals of IT Strategy, and align them with the business strategy and objectives. You can use tools such as balanced scorecard, value proposition, and strategic map to articulate the value that IT delivers to the business, and the key performance indicators (KPIs) that measure the success of IT initiatives. You can also use tools such as SMART criteria, OKRs, and roadmaps to set specific, measurable, achievable, relevant, and time-bound goals, and plan the actions and resources needed to achieve them.
Developing a deep understanding of IT strategy's business impact requires a holistic and multifaceted approach. Strategic alignment, stakeholder collaboration, continuous assessment, adaptability, risk management, effective communication, and employee education collectively contribute to an organization's ability to harness technology for its business objectives. By integrating IT into the broader business strategy, organizations can ensure that technology initiatives not only align with overarching goals but also drive innovation, efficiency, and sustainable growth.
This should be the first step, because if there is no place to go to motivate change, why change? Future state objectives are always top-down, business, operations, processes, technology. As well as KPIs to know that we are aligned. Value maps help to get an idea of the relationships but not of the values of these KPIs that need to be disaggregated from top-down to bottom-up.
The third step is to analyze the alternatives and risks of IT Strategy, and select the best option that maximizes the value and minimizes the costs and risks. You can use tools such as cost-benefit analysis, return on investment (ROI), total cost of ownership (TCO), and value stream mapping to estimate the costs and benefits of different IT solutions, and compare them with the expected outcomes and impacts. You can also use tools such as risk matrix, risk register, and risk response plan to identify, assess, prioritize, and mitigate the potential risks and uncertainties of IT projects and operations.
ROI is a bear trap if it is not an ex-post ROI. However, the TCO combined with the customer's internal ROI is the right combination. It is absurd to pose ROIs to customers when the benefits of the business depend very much on each customer and their execution. Another thing is to identify all the value and help the customer in this construction. However it is done, it must be collaborative between both parties. Risk management is another key point, also in a collaborative mode with the customer.
The fourth step is to communicate and collaborate with the stakeholders and users of IT Strategy, and ensure their engagement and support. You can use tools such as stakeholder analysis, communication plan, and feedback mechanisms to identify the key stakeholders and users of IT, and their roles, interests, and expectations. You can also use tools such as newsletters, presentations, workshops, and demos to communicate the vision, goals, benefits, and progress of IT Strategy, and solicit their input, feedback, and suggestions.
One such approach, which I have personally found highly effective, is conducting internal Technology Roadshows - exclusive Tech events that unveil the progressive outcomes of digital product journeys. Through this approach, the digital journey outlined in your IT Strategy transcends mere implementation, evolving into a collective, passion-driven pursuit of shared ambitions and extraordinary outcomes.
Communication plays a pivotal role in developing a deep understanding of IT strategy's business impact. IT professionals need to effectively communicate the value proposition of technology initiatives to various stakeholders, including executives, employees, and external partners. This involves translating technical details into business language, emphasizing the positive impact on productivity, innovation, and customer satisfaction. Clear and transparent communication builds trust and ensures that stakeholders recognize the strategic importance of IT in driving business success.
The fifth step is to implement and monitor the IT Strategy, and ensure its alignment and performance. You can use tools such as project management methodologies, agile frameworks, and change management techniques to execute the IT projects and initiatives, and manage the scope, time, quality, and resources. You can also use tools such as dashboards, reports, audits, and reviews to monitor the IT performance and outcomes, and compare them with the KPIs and goals.
This is the most important thing which most of the IT vendors don't usually do. Their main objective usually becomes to be done with the "go-live" and then they vanish. There should always be a solid project assurance program with valid recommendations to show if the project has been delivered successfully or not, ways to full proof and of course monitor all along thereafter.
The sixth step is to evaluate and improve the IT Strategy, and ensure its continuous improvement and adaptation. You can use tools such as surveys, interviews, and focus groups to measure the satisfaction and impact of IT on the stakeholders and users, and identify the gaps, issues, and lessons learned. You can also use tools such as PDCA cycle, root cause analysis, and Kaizen to analyze the causes and effects of IT problems and opportunities, and implement the corrective and preventive actions and improvements.
In my experience, most IT strategists get bogged down in too many roadmapping exercises and forget that it's the people that make the difference. I would encourage IT leaders to perform a full organizational change assessment to establish a proper people & adoption strategy. It is critical to have the right people, skills, and tools to effectively realize the full value of IT strategy.
Furthermore, understanding the business impact of IT strategy requires a comprehensive awareness of the organization's risk landscape. IT professionals must be adept at identifying and mitigating potential risks associated with technology initiatives. This involves considering not only cybersecurity risks but also broader operational, financial, and compliance risks. Developing a robust risk management framework allows organizations to proactively address potential challenges, safeguarding both the continuity of IT services and the overall business operations.